Navigating the Handysize and Ultramax Markets: An Update on the Shipping Trade Winds

As the shipping industry sails through turbulent waters, we take a closer look at the current landscape of the Handysize and Ultramax markets, which are influenced by a multitude of global forces. With many regions experiencing both calm and stormy conditions, the maritime world continues to adjust to shifting tides.

 

A Tempest of Opportunities

• US Gulf / US East Coast (USG/USEC): The trade winds have been blowing uncertainly across the US Gulf and East Coast as tensions between the US and China continue to ripple across the market. Despite these geopolitical waves, the volume of fixtures has remained steady, pushing rates slightly higher. The outlook for the upcoming week suggests a steady course, although concerns linger over capacity concentrations, which could cause turbulence. As more ships congregate in certain ports, the potential for delays and rate pressure remains ever-present.

• East Coast South America (ECSA): It’s been a quiet week off the coast of South America, with little change in rates. However, the North has been feeling stronger winds than the South, thanks to short supply and heightened demand. As we look to the coming weeks, the storm clouds of capacity buildup in West Africa threaten to bring pressure on the market. 

• Continent: A steady course seems to be the theme in the Continent as market fluctuations remain minimal. With a consistent flow of cargo, stability seems to be on the horizon, and next week may see the market find its balance. However, those navigating the waters here must still remain vigilant, as shifts in global supply and demand could cause sudden swells.

• Mediterranean: The Mediterranean has seen an uptick in activity, particularly with grain cargoes from the Black Sea and minerals from the Eastern Mediterranean. Charterers have concluded fixtures at slightly higher levels, signaling a fresh breeze of opportunity. Yet, the shadow of the Russia-Ukraine conflict looms large, and developments in these discussions will certainly impact the market's course in the coming weeks. Market players must stay agile, ready to change direction at a moment’s notice.

• Middle East Gulf / India (MEG/India): In the Middle East Gulf and India, the market has proceeded at a slow, rhythmic pace during Ramadan, with only limited activity making waves. South Africa’s demand has drawn the larger vessels of this sector, providing a brief moment of reprieve. The outlook for the coming week appears much the same, with capacity build-up continuing to pressure rates. The market is on a steady keel but will require careful navigation to avoid stagnation. 

• Southeast Asia / Far East (SE Asia/FEast): The southern sector of Southeast Asia began the week in relatively calm seas, but the arrival of fresh demand from Australia midweek gave the market a boost. In the northern area, limited capacity sent rates rising, driving the market higher. Should Australia continue to supply new demand, expect bullish sentiment to continue into next week, as the wind fills the sails of the region's trade.

 

Navigating the Bigger Vessels

• US Gulf / US East Coast (USG/USEC) : For the Ultramax segment, the currents have been similarly uncertain due to US-China tensions. While discussions around Inter Gulf and West Coast destinations have kept the waters moving, routes such as Transatlantic (TA) and Far East (FH) have been quieter, with concentration in capacity taking center stage. Shipowners should brace for further pressure on rates in the coming week as the market attempts to find equilibrium amidst these geopolitical currents.

• East Coast South America (ECSA): The mood in ECSA has been split like the tides at high and low water. The early part of March saw demand waning, but as the second half of the month rolls in, a rise in cargo flow has stoked optimism. Expect improvements in the upcoming week as stronger winds of demand begin to pick up.

• Continent: The market in the Continent has been under pressure, with scrap cargoes to the Eastern Mediterranean offering the only premium amid an otherwise lackluster market. Although mid-March demand still muted the available tonnage is  limited, thus  expect a more balanced outlook next week. 

• Mediterranean: The Mediterranean market has been in a holding pattern, with oversupply continuing to dampen rates. As this region faces a bearish sentiment, rates are expected to head lower in the coming week, unless any sudden change in cargo flow brings a new wind to the sails of the market.

• South Africa (SAFR): On the shores of South Africa, a positive shift is underway. Limited supply and rising demand have brought a breath of fresh air to the market, lifting spirits for the time being. This momentum is expected to continue into the coming week, as the region remains poised to benefit from an upswing in activity.

• Middle East Gulf / India (MEG/India): The Middle East Gulf and India market has been sailing through the calm waters of Ramadan with few ripples to report. Activity has remained muted, and with no signs of significant change on the horizon, expect slow movements and low demand to persist in the near term.

• Southeast Asia / Far East (SE Asia/FEast): The northern part of Southeast Asia is seeing rising tides, driven by strong demand for backhaul and North Pacific (NOPAC) voyages. However, the southern sector has been less fortunate, with Indo coal volumes failing to pick up the slack. While Australia’s fresh demand offers some support, it has not been enough to stabilize the market. Expect the northern area to remain firm next week, while the southern part may face calmer seas.

 

 

Conclusion: Riding the Waves of the Shipping Market

As we navigate the handysize and ultramax markets, it’s clear that both sectors are influenced by a multitude of factors — from geopolitical tensions and capacity concentrations to shifting demand across regions. While some areas are sailing toward brighter horizons, others face choppy waters. Shipowners, charterers, and brokers alike must stay sharp, ready to adjust course as the tides change. Keep your navigational charts updated and your sails set for the next wave of market movements.

 

Disclaimer

This report and the information contained herein are for general information only and does not constitute an investment advice